See infra Section III.B.2. U.S. Plaintiffs urge the court to extrapolate this text ads-specific evidence to infer that Google has monopoly pricing power in the broader search ads market. See UPFOF ¶ 589 (“Text Ads constitute approximately 64% of the Search Ads market; Google’s pricing power in the Text Ads market therefore confers on Google the ability to control price in a significant portion of the Search Ads market, even without regard to any of Google’s other Search Ads products.”). But cf. FOF ¶ 185 (changes to the text ads auction do not directly impact the PLA auction).
The court declines to make such a simplistic extrapolation to sustain a finding of monopoly power. Cf. ThermoLife Int’l LLC v. Neogenis Labs Inc., No. 18-cv-02980 (DWL), 2021 WL 1400818, at *8–10 (D. Ariz. Apr. 14, 2021) (finding that the court could not “infer” power in a broader market based on power in a narrower one because the plaintiff had not alleged the relative size of the submarket in relation to broader market). Text ads comprise 64% of the search ads market defined by U.S. Plaintiffs. Tr. at 4797:7-10 (Whinston). That is a large number, even if overstated by some degree due to U.S. Plaintiffs’ exclusion of Amazon’s product-page ads from the calculation. But Dr. Whinston’s analysis of PLA pricing from 2016 to 2021 demonstrates that while Google has raised text ads prices, PLA prices, which comprise approximately 40% of the search ads market, have been stagnant, only showing nominal growth beginning in 2020. See id. at 4650:2-20 (Whinston) (discussing UPXD102 at 39) (“[W]hat you can see here is PLA prices have been flat or, if anything, a little decreasing, and text ad prices have been going up.”). That prices have remained flat in nearly 40% of the market is inconsistent with the notion that Google has monopoly pricing power in the search ads market as a whole.
181
